GEORGE SOROS: Europe Is Just Entering 25 Years Of Stagnation

"Japan is just trying to break-out of 25 years of stagnation,
where Europe is just entering," he warned. "The European Union is
not a nation. It’s an incomplete association of nations and it
may not survive 25 years of stagnation"

"You have to go further with the integration," he argued. "You
have to solve the banking problem, because Europe is lagging
behind the rest of the world in sorting out its banks."

"What is facing Europe, unless there is a
more radical change is a long period of stagnation. Nations can
survive in that way. Japan is just trying to break-out of 25
years of stagnation, where Europe is just entering. The European
Union is not a nation. It’s an incomplete association of nations
and it may not survive 25 years of stagnation.

"The financial crisis as such is over. But now we are facing a
political crisis, because the Euro crisis has transformed what
was meant to be a voluntary association of equal sovereign states
that sacrificed part of their sovereignty for the common good
into something radically different. It is now a relationship
between creditors and debtors, where the debtors have difficulty
in paying and servicing their debt and that puts the creditors in
charge. And that divides the Eurozone into two classes – the
creditors and debtors. The creditors are in charge and
unfortunately the policy that Germany in particular is imposing
on Europe is counter-productive and is making the condition of
the debtor countries worse and worse. So, right now Europe is
already growing a little bit, the Eurozone, but that’s only
because Germany is forging ahead and more than let’s say Italy
and Spain are falling behind. "

On Central Banks and whether he cares about the weakness
we saw in the data and deflation:

"That’s going to be a very tough year for the banks. They are
under pressure, because they have to meet the stress test. The
banks have an interest in passing the stress test rather than
reviving credit to the economy, so the banks have a transmission
mechanism for the people’s savings channeling it into the real
economy. They are not fulfilling their function."

On Ukraine's impact on Europe:

"Ukraine is a wake-up call to Europe, because Russia has emerged
as a rival to the European Union. Putin has tried to reconstitute
the Russian empire as a rival for the European Union and has been
very successful politically. Not terribly unsuccessful
financially and economically, because the Russian economy is not
doing well at all, but Putin has outplayed, outmaneuvered the
European Union, because Europe it [inaudible] to form, it
demanded too much and offered too little. So, it wasn’t difficult
for Putin to output it. But the Ukrainian people stood up and
demonstrated by actually sacrificing their lives. Their
commitment to be part of Europe, so this is a challenge for
Europe and Europe needs to rediscover its own European identity
instead of each country just pursuing its national interests and
getting further and further into conflict with the others. There
are certain core principles and this is a political thing –
democracy, open society, freedom that Europe has believed in and
ought to actually stand up and be united."

"Putin has a very different idea of what a society should be
like. He believes that people can be manipulated. He actually has
got a blind spot. It’s beyond his comprehension that people can
spontaneously resist. He believes that if Ukraine resists that
there is a conspiracy that people, that Americans, CIA, my
foundation are conspiring to threaten him or to undermine is
policies. And that’s not the case, people do believe in freedom.
"